Five Ways Upskilling at Your Company Will Reduce Costs and Increase Productivity
Businesses invest in a variety of capital, including facilities, equipment, and technology. However, the human capital of a company may be its most crucial capital. Human capital can take time to nurture and train before an employee is fully contributing to the operation and income of a company, in contrast to a piece of equipment or software that is ready to work at full capacity upon purchase. Human capital, in contrast to other forms of physical capital, can be challenging to replace. However, because people routinely leave one job to take another, replacement occurs frequently. The Balance reports that the typical worker nowadays switches employment 12 times throughout their career.
A company suffers from employee turnover for a number of reasons, not the least of which is simply financial. Employers can, however, be proactive by taking measures to save expenses and boost productivity while also reducing turnover and keeping that human capital. Upskilling existing employees—training them to acquire new skills and information they can use in the workplace, whether in their current positions or in new roles within a company—is one of the most efficient steps. Employers who embrace this effort will experience the following five key advantages:
Prevent High Employee Turnover Costs
You have to deal with the burden (and expense) of finding a replacement every time an employee leaves, so the comparison is not fair. Some sources claim that it can cost 6 to 9 months of pay to replace a paid employee. It will cost between $30,000 and $45,000 to find a replacement for an IT staffer who made $60,000 a year. That percentage is even greater for occupations requiring advanced degrees and seniority. Then, you must take into consideration the lag period—which could last up to two years—during which the new employee becomes fully operational. Upskilling personnel is a lot more cost-effective option than finding, employing, and training replacements, and it can increase retention rates and save costs.
Employees Want Chances to Learn and Advance
According to research, your employees want to continue learning, advance their skill sets, and contribute more to the business, yet many of them believe they are underutilised in their current positions. According to Gallup study, 70% of workers are not performing to their maximum capacity. Your employees feel more useful, empowered, and fulfilled at work when you provide them the chance to grow by providing opportunities to master new skills. Your employees will be less inclined to depart for another job as a result of upskilling. Give them chances to learn and develop, as boredom is the top reason people quit their jobs in 2018.
Learning Promotes Employee Engagement and Boosts Productivity
Offering opportunities for learning and growth can significantly increase employee engagement. Employee disengagement is a widespread—and expensive—problem today. According to research, disengaged workers harm revenue, teamwork, quality, and customer service, among other things. There is a lot of disengagement. Only 15% of workers worldwide, according to a Gallup survey, are actively engaged at work. Employee engagement rises when a company provides possibilities for learning and growth.
Maintaining relationships and teamwork through employee training
Because it preserves social capital, upskilling also aids in enhancing teamwork and subsequently productivity. When new hires begin working for your organisation, they have no established social connections and must forge those connections from scratch. Teamwork is disrupted by this process, which lowers output. Additionally, not every new hire will fit into the organisational culture already in place. It’s possible that they’ll be a recurring misfit, which will have a long-term negative impact on productivity.
Learning New Skills Gives You a Competitive Edge
Businesses that train current employees for new jobs or duties are able to keep those workers, saving the expense of finding a replacement. Additionally, upskilling boosts social capital retention and worker engagement, both of which promote productivity. You have a competitive advantage thanks to all four of those elements.